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(Alliance News) - London Stock Exchange Group said Friday it started the year well with cost savings from its integration of new acquisition Refinitiv running ahead of plan.
Revenue for the first half of 2021 jumped to GBP2.99 billion from GBP877 million a year ago, with pretax profit nearly doubling to GBP510 million from GBP262 million.
"LSEG has delivered a good financial performance in the first half of the year, reflecting revenue growth across all divisions," said Chief Executive David Schwimmer.
LSEG said the "favourable outlook" supports a 7% increase in its interim payout to 25.0 pence from 23.3p a year before.
The firm added it progressed its integration of Refinitiv in the half-year, and its cost synergy programme is ahead of plan with GBP77 million realised in the period. As a result, it raised full-year run-rate cost synergy guidance to GBP125 million from GBP88 million.
LSEG finally completed its USD27 billion acquisition for financial market data and infrastructure provider Refinitiv in January after first making its interest clear back in July 2019.
"Revenue synergies have had a good start, at GBP4 million run-rate achieved, though will take time to build while requiring upfront investment already included within our stated investment expectations," LSEG said.
Looking ahead, the company said it expects to maintain good momentum in the second half and is confident it will meet its financial targets. It expects costs to grow by around 5% at constant currency, before slowing to low-single digit growth in 2022 and 2023.
"We are executing well on our integration plans to deliver the strategic and financial benefits of the Refinitiv transaction," Schwimmer said.
"We continue to invest in projects that enhance our customer offering and deliver a more scalable and efficient business, particularly in Data & Analytics. This will support our revenue growth ambitions and lead to further operating margin improvement," he added.
LSEG shares were up 3.0% early Friday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.1% at 7,114.15
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Hang Seng: up 0.1% at 26,227.39
Nikkei 225: closed up 0.3% at 27,820.04
DJIA: closed up 271.58 points, or 0.8%, at 35,064.25
S&P 500: closed up 26.44 points, or 0.6%, at 4,429.10
Nasdaq Composite: closed up 114.58 points, or 0.8%, at 14,895.12
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EUR: down at USD1.1828 (USD1.1843)
GBP: soft at USD1.3921 (USD1.3935)
USD: firm at JPY109.77 (JPY109.71)
GOLD: up at USD1,800.53 per ounce (USD1,802.55)
OIL (Brent): up at USD71.81 a barrel (USD70.85)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
0830 EDT US monthly jobs report
1000 EDT US monthly wholesale trade
1500 EDT US consumer credit
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Runaway growth in UK house prices moderated a touch in July, data from Halifax showed. House prices rose 0.4% in July on a month-on-month basis, recovering after a 0.6% dip in June. Annual growth moderated further, to 7.6% in July from 8.7% in June and after May's near-10% jump. This moderation aligns with the tapering of the government's stamp duty incentive. In March, UK Chancellor of the Exchequer Rishi Sunak extended the stamp duty holiday from the end of that month until the end of June at GBP500,000, and now a new GBP250,000 threshold applies until the end of September. Halifax noted the annual growth rate in July was the slowest since March.
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A shortage of candidates has pushed job starting salaries in the UK to rise at record rates, according to a new survey. KPMG and the Recruitment & Employment Confederation's UK Report on Jobs survey found the rate of salary inflation in July was the sharpest in nearly 24 years of data collection. It said the salary increase was driven by a "rapid decline in available candidates due to concerns over job security amid the pandemic". A Brexit-induced shortage of European workers and a generally low unemployment rate also helped drive salary inflation, with demand for workers vastly outstripping supply as Covid restrictions eased and economic activity picked up.
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BROKER RATING CHANGES
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MORGAN STANLEY RAISES UNILEVER TO 'EQUAL-WEIGHT' (UNDERWEIGHT) - PRICE TARGET 4,200 PENCE
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MORGAN STANLEY RAISES BP TO 'EQUAL-WEIGHT' (UNDERWEIGHT) - PRICE TARGET 342 (305) PENCE
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DEUTSCHE BANK CUTS DIRECT LINE TO 'HOLD' (BUY) - PRICE TARGET 340 (350) PENCE
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COMPANIES - FTSE 100
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Hikma Pharmaceuticals reported interim profit growth and lifted the full-year outlook for its Generics division. Revenue for the first half of the year rose 7% to USD1.22 billion as all three divisions - Generics, Global Injectables and Branded - performed well. Pretax profit rose 16% to USD319 million from USD274 million. Generics delivered "strong" revenue growth and significant margin improvement, while Global Injectables saw modest sales growth after a stellar showing a year ago. Branded achieved double-digit revenue growth and improved margins. It now expects Generics revenue in a range of USD810 million to USD830 million for 2021 as a whole, up from previous guidance of USD770 million to USD810 million to reflect a strong performance from recently launched products. Full-year forecasts for the other two units were retained.
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TotalEnergies is considering taking a stake in what will be the world's largest offshore wind farm, in the North Sea, Bloomberg reported on Thursday. The Paris-based oil major could buy a roughly 20% stake in the Dogger Bank wind project, which is being developed by the UK's SSE and Norway’s Equinor, Bloomberg said, citing "people familiar with the matter".
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COMPANIES - FTSE 250
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Sanne Group confirmed that, after Apex's takeover interest, it is still in merger talks with Cinven and requested a 'put up or shut up' deadline extension. "Cinven is considering its options and continues to work closely with Sanne regarding a possible offer," said Sanne, a London-based provider of alternative asset and corporate services. Cinven now has until August 30 - the same deadline as rival suitor Apex - to either announce a firm offer for Sanne or walk away.
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ContourGlobal raised its quarterly dividend by 10% to 4.465 cents per share, adding it expects to continue to increase its payout by 10% annually. The operator of 115 contracted power generation plants reported pretax profit for the six month that ended June 30 of USD65.5 million, down 36% from USD101.6 million a year ago, on revenue of USD935 million, up 38% from USD680 million. However, adjusted earnings before interest, tax, depreciation and amortisation rose 16% to USD406 million from USD351 million, and ContourGlobal raised its full-year guidance for adjusted Ebitda to between USD780 million and USD810 million.
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COMPANIES - GLOBAL
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Allianz said it has stayed the course in the second quarter, and now expects operating profit to hit EUR12 billion in 2021. "All three business segments showed healthy growth," Allianz said. "Our Property-Casualty insurance proved its resilience while coping with substantial natural catastrophes. High demand for our Life-Health insurance products resulted in dynamic revenue growth, and our Asset Management business continued to grow and reached a new historic high in assets under management." In the three months to June 30, the Munich-headquartered firm recorded net income of EUR2.36 billion, 46% higher from EUR1.62 billion a year before. Operating profit surged 30% year on year to EUR3.32 billion from EUR2.57 billion. Total revenue rose 11% to EUR34.3 billion from EUR30.9 billion.
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Friday's Shareholder Meetings
Cake Box Holdings PLC - AGM
Eight Capital Partners PLC - AGM
GSTechnologies Ltd - AGM
Wincanton PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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